What are the gains from specialization and trade?
What will be an ideal response?
From society's standpoint, the total output of goods and services available for consumption is greater with specialization and trade. From an individual's perspective, each person who specializes enjoys being able to consume a larger bundle of goods and services after trading with others who have also specialized, than would otherwise be possible under self-sufficiency. These increases are the gains from specialization and trade for society and for individuals.
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If a Pizza Hut raises the price of a slice of pizza from $3.00 to $3.25, the quantity demanded decreases from 1,500 slices per week to 1,300 slices per week
The demand for slices of pizza is ________ and the total revenue received by this Pizza Hut ________. A) elastic; decreases B) inelastic; decreases C) elastic; increases D) inelastic; increases E) unit elastic; does not change
Downsizing is the practice of laying off workers in an attempt to decrease average total cost. Can laying off workers decrease average total cost? Is it possible for the firm to downsize and have its average total cost increase? Explain your answer
What will be an ideal response?
U.S. government bonds have no default risk because
A) they are issued in strictly limited quantities. B) the federal government can increase taxes or print money to pay its obligations. C) they are backed with gold reserves. D) they can be exchanged for silver at any time.
The practice of firms temporarily reducing prices in order to eliminate competition is called:
A. competitive pricing. B. predatory pricing. C. discount pricing. D. strategic pricing.